• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Technology

Wilson likes technology, which might come as a surprise since tech stocks are getting hit particularly hard. But the analyst is finally starting to see some value in the space.

“There’s plenty of high quality stocks in tech that are not that expensive,” he said. “And we have taken a lot of froth out there, so that’s a form of defensiveness that has some growth to it.”

Morgan Stanley has an overweight rating on Microsoft and recently raised its price target on the shares to $372. With the stock currently trading at around $300, that target implies potential upside of 24%.

Investors can also get exposure to this fast-growing sector through exchange-traded funds like the Vanguard Information Technology ETF (VGT) and Technology Select Sector SPDR Fund (XLK).

Elevate Your Investments with Moby

Gain a competitive edge with Moby's expert investing insights. Our data-driven analysis and personalized recommendations empower you to make smarter investment decisions. Enhance your portfolio and stay ahead of market trends. Start your journey to financial success today at Moby.

Get Started

Healthcare

Healthcare serves as a classic example of a defensive sector thanks to its lack of correlation with the ups and downs of the economy.

At the same time, the sector offers plenty of long-term growth potential due to favorable demographic tailwinds — particularly an aging population — and plenty of innovation.

Wilson also likes healthcare because “it’s cheaper than tech.”

Average investors might find it difficult to pick out specific healthcare stocks. But healthcare ETFs can provide both a diversified and profitable way to gain exposure to the space.

The Health Care Select Sector SPDR Fund (XLV) invests in a wide variety of healthcare giants — including Johnson & Johnson, UnitedHealth Group and Thermo Fisher Scientiging — and has returned more than 85% over the past five years.

If you’re looking for individual names, Morgan Stanley has issued overweight ratings on Eli Lilly and AbbVie with price targets of $272 and $142, respectively.

REITs, consumer staples and utilities

Wilson also touched on three sectors for defensive investors who don’t necessarily require a growth component.

“If you go pure defense, it’s utilities and staples and REITs,” he said. “Of that group, I’d say we prefer REITs and staples more than utilities.”

REITs stand for real estate investment trusts — companies that own income-producing real estate and then pass the rent to shareholders through regular dividend payments.

For centuries, people have used real estate as a key vehicle to preserve and grow their wealth — particularly during periods of high inflation like we’re currently experiencing.

Companies in the consumer staples sector also stand out for their ability to deliver consistent dividends.

Case in point: Procter & Gamble, maker of Tide laundry detergent, Gillette razors and dozens of other household essentials, has increased its dividend for 65 consecutive years. Morgan Stanley has an overweight rating on the consumer products giant and recently raised its price target to $177.

Investors can also find plenty of recession-resistant names in the utility sector.

No matter what happens to the economy, people will still need to heat their homes in the winter and turn the lights on at night.

Morgan Stanley has overweight ratings on several utility stocks including American Electric Power and Atmos Energy.

Follow These Steps Once Your Portfolio Reaches $100K

If you've amassed a $100k+ portfolio, it's time to meet with a trusted advisor. Zoe Financial's elite network of fiduciary advisors offers personalized strategies to enhance your financial success. Experience exclusive investment opportunities and bespoke wealth management services.

Trust Zoe Financial for unparalleled expertise and a commitment to your prosperity.

Get Started

Trending on MoneyWise

Sponsored

This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Jing Pan Investment Reporter

Jing is an investment reporter for MoneyWise. He is an avid advocate of investing for passive income. Despite the ups and downs he’s been through with the markets, Jing believes that you can generate a steadily increasing income stream by investing in high quality companies.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.